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Luxembourg Tax alert 2018-09

Luxembourg Tax alert 2018-09

ECOFIN formally adopts new Mandatory Disclosure Requirements for Intermediaries and Taxpayers - Entry into force expected June 2018



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On 25 May, 2018, the most recent amendments to the Directive on administrative cooperation in the field of taxation (“DAC 6”), which introduce mandatory disclosure requirements for tax intermediaries, were formally adopted by the Economic and Financial Affairs Council (ECOFIN).

The publication of the Directive the Official Journal of the European Union is expected shortly. The importance of this is that these new mandatory disclosure rules will enter into force twenty days after the publication in the Official Journal, therefore most likely in June 2018.

Transposition in Luxembourg

Luxembourg, like any other Member States, is required to adopt and publish the laws, regulations and administrative provisions necessary to comply with the Directive by December 31, 2019 at the latest. The provisions will be applicable from July 1, 2020.

Furthermore, it must also take the necessary steps to require intermediaries and relevant taxpayers to disclose information on cross-border arrangements - the first step of which was implemented between the date of entry into force of the Directive (expected June 2018), and date of application (1 July 2020) of DAC 6. Information on these reportable arrangements will have to be reported by 31 August 2020.

Please refer to our newsletter 2018-01 for more details on DAC 6.

KPMG Luxembourg comment

The speed with which the disclosure requirements have been adopted – less than 12 months from the Commission’s initial proposal – is almost unprecedented in the area of EU tax law. It will be interesting to see how Luxembourg and the other Member States will implement the new provisions into local legislation.

It appears that several Member States are considering extending the reporting obligations to domestic arrangements or to other taxes that are not covered by the EU Directive. In a recent statement published by the ECOFIN, Germany has noted that the national legal professional privilege also applies to auditors, tax advisors and chartered accountants in the same way as for lawyers. Other Member States that provide for professional legal privilege under national law are expected to follow suit. Luxembourg has not taken any position on all these points yet.

In light of the requirement to report on arrangements, the first step of which was implemented as early as the date of entry into force of the Directive, qualifying intermediaries and relevant taxpayers need to consider any adjustments to their internal processes that are required to comply with their obligations under the new rules. It remains to be seen whether Luxembourg and the other Member States will take this into account when issuing domestic guidelines.

Should you have any queries, please do not hesitate to contact us.

Any tax advice in this communication is not intended or written by KPMG to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.

Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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